Can MGM Resorts Stand Up to Gaming's Biggest Players?

On Thursday, MGM Resorts will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

MGM Resorts has suffered from having a less extensive presence in the lucrative Macau market than its rivals, while having become overly burdened with debt at the worst of times for its core Las Vegas market. Yet some new opportunities and improving conditions have pulled the stock back up to its highest levels in more than a year. Let's take an early look at what's been happening with MGM Resorts over the past quarter and what we're likely to see in its quarterly report.

Stats on MGM Resorts

Analyst EPS Estimate

($0.10)

Year-Ago EPS

($0.09)

Revenue Estimate

$2.34 billion

Change From Year-Ago Revenue

2.1%

Earnings Beats in Past 4 Quarters

2

Source: Yahoo! Finance.

Will MGM Resorts score a big win this quarter? In recent months, analysts have gotten more optimistic about MGM's earnings prospects, having narrowed their loss estimates for the just-ended quarter by $0.02 per share and their full-year 2013 per-share loss consensus by $0.08. The stock has also done reasonably well, rising 6% since late January.

MGM has built a history of being the odd player out in many of the most lucrative opportunities in the gaming industry. In Macau, the company is stuck in the slower-growth area of the Asian gaming destination. In Las Vegas, the new CityCenter area in the mid-Strip has watered down MGM's opportunities and has created another potential barrier for patrons coming from the northern end of the Strip to its namesake MGM Grand property. And in New Jersey, where online gaming has boosted prospects for Caesars Entertainment and Boyd Gaming , MGM has no exposure.

MGM's debt remains a big sticking point, with its $13.6 billion in outstanding debt dwarfing its $6.7 billion market cap. Combined with weak operating margins, MGM hasn't been able to finance that debt and stay profitable, and despite rock-bottom interest rates giving the company the best chance possible to refinance on favorable terms, analysts don't expect that to change before 2015 at the earliest.

In MGM's quarterly report, be sure to compare its results to those of its rivals both in the U.S. and in Macau. With the industry in flux right now, MGM needs to avoid getting left behind yet again.